Avoiding the Latest Handbook Traps for the Unwary in the Age of Remote Work
September 08, 2022
Most employers know their employee handbooks need to be living documents that are reviewed and updated when conditions change. If any employer doubted the need for doing this, the past two years should have convinced them otherwise – with the need to incorporate policies to address statutorily mandated COVID-19 sick leave and/or vaccinations. While many of the mandatory COVID-19 sick leave policies are sunsetting, the sun is just rising for remote work issues. Indeed, employee handbooks are often more vital in the remote work setting since a remote worker cannot walk down the hall and ask HR questions.
Obviously, not all employment situations are equally able to incorporate remote work. The primary work at some businesses simply cannot be conducted anywhere but at the work site. But even in those settings, the past several years have taught us that remote work is at least possible for some jobs. So, while employers do not need to permit remote work in all cases, handbooks should refrain from saying the company will automatically reject requests for remote work. This is particularly true for situations where the employer is obligated to reasonably accommodate an employee with a disability. This does not mean agreeing to allow an employee to work remotely whenever requested—just acknowledging that it is an option you will consider as part of the interactive process. After the past few years, investigators at the EEOC and similar state agencies will approach failure to accommodate charges from the framework that remote work is generally reasonable and will be unimpressed by a per se refusal to consider remote work.
Outside of the disability accommodation context, it is entirely an employer’s choice whether to allow remote work. Many employers who would never have countenanced the option have discovered that remote work is a great hiring incentive that allows them to draw talent from around the country as opposed to just locally. They also have seen that many potential employees are willing to trade some pay for the increased flexibility of working from home. Furthermore, remote workers mean smaller on-site offices and a reduced office space spend. If you are one of these businesses, you will need appropriate handbook policies in place.
1. What positions are eligible? Don’t make ad hoc decisions regarding the positions eligible for remote work. Doing so creates the possibility of an unfair application. First, determine the positions that can physically be performed remotely. Second, narrow that list to exclude those positions that cannot be performed remotely without a significant loss to efficiency (for instance those where face-to-face communications are vital). You may be required to examine some positions outside that list for a medical accommodation, but having conducted a careful analysis beforehand will bolster an argument that the accommodation is not reasonable if it is requested.
2. Who is eligible? You may allow this option to everyone, but employers also are permitted to make flexible work something of a benefit that is earned through good work (just be careful to act consistently). Legitimate criteria would include having worked with the company for a set length of time, demonstrating knowledge of the job in past evaluations or otherwise demonstrating the ability to responsibly handle working from a non-office location. If you choose to be an employer that makes the ability to work remotely a benefit that is earned, make sure to clearly state how that benefit is earned to avoid inconsistent application.
3. State expectations. If you have employees working remotely, your handbook should contain policies establishing that your expectations do not change if the employee is working remotely or from home. Those who cannot demonstrate that they can handle the responsibility of remote work (or who show they require in-person supervision) will either have the benefit of being able to work remotely taken away or will be separated. It is also vitally important to demand and enforce rigorous timekeeping standards from your hourly employees who work remotely. Your obligations to pay appropriately do not change even when your employee is outside of the office, and remote work is fraught with issues under the Fair Labor Standards Act or comparable state laws due to poor timekeeping records. Remember, it is always the employer’s responsibility to track time correctly no matter where the employee is located.
4. What if we cross state lines? One thing employers often can forget is that a remote employee who is working predominately in a state other than the one where the employer is based will be subject to the employment laws of the state where they physically perform work. For instance, many states have adopted their own minimums for sick leave and/or vacation leave, and you will need to make sure you are complying with those statutory minimums. So, the handbook should address every state where you have employees, which may require updating every time you hire a new remote employee. This can be addressed either by listing each state’s requirements (very time consuming and requires constant updates), having a global handbook that refers to a state page addendum (either one addendum for every state, or smaller per state addendums) that identify policies unique to the state, or adopting a universal handbook that sets out terms that would be compliant in every state where you have employees. Depending on where you hire, that can create unexpected issues (for instance, one California employee can lead to everyone getting increased PTO).
5. The Acknowledgment Page. Finally, do not overlook the acknowledgment page. A Maryland employer recently learned this lesson the hard way. This business had adopted a mandatory arbitration policy, as many employers do now. While this agreement was a separate document from the handbook, the handbook’s acknowledgment page confirmed that the employee had read and understood all of the separate documents, including the policy regarding harassment and the arbitration agreement. This acknowledgement concluded with the employee agreeing that: “The employer has the right, from time to time, to make and enforce new policies and procedures and to enforce, change, abolish or modify existing policies, procedures or benefits applicable to employees as it may deem necessary with or without notice.”
When the employer attempted to enforce the arbitration agreement after being sued by an employee, the Federal Court in Maryland held, and the Court of Appeals for the Fourth Circuit (which oversees North Carolina, South Carolina, Virginia, West Virginia, and Maryland) affirmed that the acknowledgment page was a part of the arbitration agreement. Because the acknowledgment gave the employer the right to make modifications to any agreement, including the arbitration agreement, it rendered the arbitration agreement illusory, and the courts refused to enforce the arbitration agreement. While the acknowledgment page is a key piece of an effective handbook (and every employer’s handbook should include one), this case reminds employers that you should not combine your handbooks with your arbitration agreements, to the extent you use them. The arbitration agreement generally must be a contracted commitment that cannot be changed by the employer. By contrast, an employee handbook is not a contract, hence the employer’s right to amend it. Because the employee handbook and arbitration agreement serve inherently different purposes, keep them separate.
As always, the employment team here at Spilman stands ready to assist you in reviewing and revising your handbooks for full compliance.